3 Big Retailers Beat Estimates in 2nd Quarter
Federated Department Stores Inc., Nordstrom Inc. and Dillard’s Inc., three leading department store operators, reported better-than-expected second-quarter earnings Wednesday, benefiting from cost-cutting and strong sales.
Specialty retailer Intimate Brands Inc., which sells Victoria’s Secret lingerie, also said its profit rose slightly more than expected.
Federated, the nation’s third-largest department store retailer, said its net income rose 60% to $107 million, or 47 cents a share, topping estimates by 3 cents, as revenue rose 2% to $3.52 billion. The results exclude a charge of $39 million in the year-earlier period from the early retirement of debt. Revenue rose 2% to $3.52 billion, and sales at stores open at least a year were up 3%.
Nordstrom’s earnings jumped 18% to $69.2 million, or 47 cents a share, 5 cents higher than estimates, as the upscale retailer kept a lid on inventory to hold down storage and distribution costs. A change in accounting in the way Nordstrom capitalized and amortized software costs added $3 million, or 2 cents a share, to the latest figures.
Nordstrom’s revenue rose 6.9% to $1.45 billion, and sales at stores open at least a year declined an expected 0.2%.
Dillard’s said its net income rose 8% to $47.9 million, or 45 cents a diluted share, beating estimates by 3 cents. Revenue rose 3.5% to $1.5 billion.
Intimate Brands’ profit increased 21% to $73.6 million, or 29 cents a diluted share, a penny higher than forecasts, as revenue rose 5.8% to $874.7 million. The retailer is 83% owned by Limited Inc.
At a Glance
Other earnings, excluding one-time gains and charges unless noted:
* CompUSA Inc. reported a loss for its fiscal fourth quarter of $17.1 million, or 19 cents a share, contrasted with a profit of $22.9 million, or 24 cents, a year ago, because of lower computer prices and slack demand. Analysts had forecast a loss of 20 cents. Revenue edged up 3.2% to $1.19 billion, and sales at stores open at least a year dropped 8.7%. CompUSA said it remains “cautious” about business conditions this fiscal year but that it is encouraged by sales of new products such as Microsoft Corp.’s Windows 98 software. It said first-quarter sales at stores open at least a year probably will be unchanged and that profit margins will narrow. The results were released after the markets closed.
* Borders Group Inc. said second-quarter profit nearly quintupled to $2.4 million, or 3 cents a diluted share, from $500,000, or 1 cent, a year ago, matching analysts’ estimates. Revenue rose 17% to $546 million. Sales at Borders stores rose 26% as sales at those stores open at least a year, or same-store sales, grew 5.4%. The Waldenbooks unit saw sales fall 3.9%, with same-store sales down 2.5%.
* Level 3 Communications Inc., which is building a $2.2 billion fiber-optic phone and data network, said it had a second-quarter loss of $1 million, or 1 cent a share, amid rising costs to build the network and hire more employees. It earned $56 million, or 6 cents a share, a year ago. Revenue rose 27% to $103 million. The company, which was spun off in March, is the former technology unit of Peter Kiewit Sons Inc.
